Electronic Recyclers International, Inc.

Reusing and Recycling: Big Challenges, Big Opportunities

2-Reusing-and-Recycling

It takes 100 tons of gold ore to get 10 ounces of the precious metal, said Privahini Bradoo, CEO of BlueOak Resources, a California-based startup that launched a large “urban mining” facility in Arkansas in 2014. But BlueOak and other recyclers can extract the same amount of gold from just one ton of printed circuit boards. Silver, too, is used in circuit boards, as well as RFID tags, CDs, DVDs and plasma display screens. BlueOak notes that, in addition to the money to be made from gold and silver, an amount equal to a third of global copper mining is thrown away with e-waste every year around the world. That’s why a single recycling facility can remove $75 million in valuable metals from e-waste annually.

According to an article in Forbes, “There’s gold in them thar’ hills — except not nearly as much as in all the computers, cellphones and sundry electronic equipment we make and then discard.” Every year, approximately $21 billion in gold and silver is used in the manufacturing of new electronic devices, reported VentureBeat, and that adds up to 320 tons of gold and 7.5 tons of silver. (Mercury is not a valuable metal, but it’s extremely toxic in the environment and recyclers do a great service by removing it from electronics.)

Of course, there’s not a great deal of precious metal in each device — 24 milligrams of gold in an average headset, the United Nations reports — but the sheer volume makes it potentially lucrative. Each year, Americans abandon 152 million mobile phones, 52 million computers and 36 million monitors. Those numbers will grow. Tablet sales are expected to reach 276 million units globally in 2017 (up from 19 million in 2010). By 2017, there will be more than 2.5 billion smartphone users around the world.

But as the volume of e-waste continues to grow, the value of gold, silver and other commodities has been dropping rapidly. In 2015, a major electronics recycler, Minnesota-based Materials Processing Corp., closed down, beset by a range of problems, the worst of which was the impossibly low profit margins from the resale of the copper, nickel, gold, silver, cobalt, platinum and other materials in the devices that were being dismantled.

The commodity price issue is a major one for “urban miners” that want to recover precious metal value from used electronics. And the problem is hurting waste recovery overall. Resource Recycling reported in 2015, “America’s largest publicly traded waste management companies indicate recycled commodity pricing is causing significant losses.”

At the 2016 International Electronics Recycling Congress in Austria, commodity prices were front and center. Thierry Van Kerckhoven, global sales manager at Umicore, said low prices are causing major problems for electronics recyclers, and have forced some to shut down in both the U.S. and Europe.

“Commodity prices will continue to be under pressure in the foreseeable future,” said the conference’s keynote speaker, Steve Skurnac, president of Sims Recycling Solutions. The situation calls for creative thinking, including partnering with big electronics producers. “Recycling companies that provide additional services and work together with manufacturers,” Skurnac said, “will be able to provide valuable services within the overall supply chain.”

Manufacturers play Key Role

Manufacturers may delight their customers by making devices ever thinner and more stylish, but recyclers see the new products as a challenge. For one thing, “There’s less precious metals like gold in components today,” said John Lingelbach, executive director of Sustainable Electronics Recycling International.

And Wired magazine pointed out in 2014 that, in some ways, computers before 2005 were more likely to be designed and manufactured for disassembly than they are today. The challenges today, the magazine said, include multiple colors and styles, ultra-thin profiles, cases without seams, glue in place of screws and big glass displays.

Some manufacturers produce products that are notoriously difficult to recycle, said John Shegerian, chairman and CEO of Electronic Recyclers International (ERI), which has recycled more than a billion pounds of material since 2005. But some companies are getting better at making their computers or other devices easily recyclable, he explained, a process that can include visiting ERI’s facilities to see the “pain points.”

One such company is Dell, which won the 2014 Institute for Scrap Recycling Industries “Design for Recycling Award” with its Latitude 10, Latitude E7240 notebook and XPS 10 tablet. In 2015, LG won for advanced televisions that are designed for dismantling “during every lifecycle phase.”

In addition to designing products for eventual recycling, some manufacturers — including Dell, Xerox, Samsung, LG, Panasonic and Sony — are also working closely with recyclers to take back their products when consumers no longer want them. Apple also has a recycling program, but is not very forthcoming about how it works.

According to MacWorld, “This lack of transparency makes it difficult to assess Apple’s e-waste operation.” Jim Puckett, founder of the Basel Action Network, told the magazine, “It’s very difficult to track, and you almost have to have internal knowledge of what [Apple’s] operations are. If we knew which recyclers they use, if they could tell us that, then we could find out where the [e-waste] is going.”

Choosing a recycling partner isn’t a casual process for these electronics companies. “Manufacturers are very concerned about which recycler they use,” said Scott Cassel, CEO and founder of the Product Stewardship Institute. “The last thing they want is their products being mismanaged and ending up in the media, reflecting badly back on the company.”

Retailers Are Helping

Recyclers certified by either R2 or e-Stewards (or both, as in ERI’s case) are also working with retailers that have set up take-back programs. Online super-seller Amazon has only very limited recycling programs, but Best Buy, Staples, Office Depot and Office Max have stepped up.

Amazon, which does have a mail-in recycling program for the Kindle book reader, received an “F” for its overall efforts from the Electronics TakeBack Coalition. Best Buy received a “B,” and Staples a “B+.”

Best Buy admits its program doesn’t break even, prompting British newspaper the Guardian to note that “Best Buy is collecting trash generated by Amazon, Walmart and other competitors” and sacrificing financially in the process. A sign of that economic pressure came in early 2016, when Best Buy said it would start charging $25 to recycle TVs and computer monitors. Everything else, including printers, ink cartridges and computers, the company will still take back at its stores free of charge.

According to Best Buy’s Laura Bishop, a sustainability spokesperson, “E-waste volume is rising, commodity prices are falling and global outlets for recycled glass, a key component of TVs and monitors, have dramatically declined.” She added, “Best Buy should not be the sole e-cycling provider in any given area, nor should we assume the entire cost.”

Best Buy’s program is changing, but it’s still important. Cassel said Best Buy “collects more than any other manufacturer-sponsored program, providing a convenience to consumers unsurpassed by other locations.”

Not all recycling happens at major retailers, though. A lot is done on the grassroots level, without big company involvement. For instance, at the University of Pennsylvania, a drive to collect unwanted devices that was part of ReThink Your Footprint 2015 — with six convenient drop-off stations — yielded 5.6 tons of material. “Universities should be leaders in this area, because we certainly buy our share of electronics,” said Dan Garofalo, the university’s sustainability director. After a solid waste awareness campaign, he said, “We’re seeing incredible participation.”

Reuse: A Potent Force

At ERI, the process of evaluating a phone or other device for potential reuse is done on a human scale. (Other activities, mainly the shredding process and glass cleaning and separation processes, are mechanized.) Workers test the units, repair them when needed, wipe the data and repackage them. Only if it can’t be resold does a device get stripped down to its component parts.

While individuals may no longer want their old phones, that doesn’t mean these devices have reached the end of their useful lives. A New York-based startup called Placemeter, for instance, will pay up to $50 a month to phone owners who set their old units to provide video feeds of busy intersections. And Bemo takes your redundant Android or iOS devices and uses it as the brains of a smart thermostat and energy management center.

The Ann Arbor, Michigan-based company Recellular, founded in 1991, showed the potential of donated cell phones by processing (and repairing) 500,000 of them a month at its peak. Half of the rebuilt phones went to domestic resellers, and half went abroad — to Africa, South America and Asia. In 2009, the company took in five million phones, and diverted 1.6 million pounds of solid waste (more than 600,000 pounds of it hazardous) from landfills.

But as with all forms of recycled electronics, the business can be cyclical and volatile. Recellular won awards, but it was hit with layoffs and then filed for bankruptcy in 2013. One problem was the increasing complexity of smartphones, which proved harder to deal with than simple call-and-text-only units.

Even without Recellular, at one time the largest player, the reuse market is thriving through resellers like Tradeups.com, SellMyCellPhones.com, EcoATM (which operates kiosks for reusable electronics), Gazelle.com, uSell.com and many others. Some major retailers such as Best Buy also buy old phones. And, of course, like all other electronic products, they can be auctioned on eBay or sold on Craigslist.

“Cellphones are currently one of the few electronic products, if not the only one, that also have a thriving reuse market,” wrote Roland Geyer of the University of California, Santa Barbara in an academic paper, titled “The Economics of Cell Phone Reuse and Recycling.”

According to Gartner in 2015, consumers upgraded their phones every 18 to 20 months, and almost two-thirds of those replaced units are being reused. That percentage could grow, as more and more phones are privately bought and owned. “The worldwide market for refurbished phones that are sold to end users will grow to 120 million units by 2017, with an equivalent wholesale revenue of around $14 billion,” Gartner said. “This is up from 56 million units in 2014, with an equivalent wholesale revenue of $7 billion. Many users are attracted to used, high-end devices that they would not have been able to purchase at the original selling price.”

There are sound economic reasons for refurbishing and reselling old phones. According to Ifixit.org, recyclers get just 50 cents for the materials in a phone, but resellers average $20 per unit.

The reuse challenge gets bigger as the waste pile grows. Anu Vedantham, director of the Weigle Information Commons at the University of Pennsylvania, delivered an e-waste talk on the campus last year, and said the issue can be daunting. “Disposal of electronics can be trickier than other forms of waste,” she explained. “At Penn, we try to donate unwanted equipment to nonprofits, but it can be complicated for privacy reasons and because of the toxic materials in the devices.”

Vedantham cites the “hype cycle” in which “new technology comes out, and everyone rushes to buy it. But expectations can lead to disillusionment, and it encourages wasteful behavior. The result is likely to be 10 old phones in the kitchen drawer, and a growing e-waste problem.” One solution from a Penn library: 35 iPads faculty can borrow for classroom use.

The Data Challenge

One major caveat in reselling used telephones, computers and other units that store information is data security. “It’s a serious problem,” said Allen Hershkowitz, who worked on electronics recycling at the Natural Resources Defense Council. “The data is out there for people to scavenge.”

In one frightening incident from 2006, some 230 Idaho Power hard drives were sold on eBay without having their data scrubbed. In an extraordinary effort, the company recovered 146 of them from the vendors, and got assurances from some of the eBay buyers. It’s not surprising such things happen — companies often use third-party vendors to get rid of unwanted equipment without a thorough background check on how data is handled.

All Green Recycling, with clients such as Homeland Security and the FBI, pointed out, “If data destruction and security isn’t handled with the care it deserves, it can lead to millions of dollars in damages and a permanently tarnished reputation.”

“Everyone is security-minded now; they don’t want their data breached,” said Shegerian, which is why ERI wipes all devices that are being refurbished or used for parts seven to 10 times, in accordance with the U.S. Department of Defense standards. All other devices go through the company’s enormous shredder, which is capable of handling over 30,000 pounds of e-waste per hour. And every device is tracked, using proprietary ERI software, throughout the recycling process, so that customers such as Best Buy, Staples and Dell can track their devices to confirm a clean wipe.

With so many of the devices we use going literally to waste, ERI’s Shegerian pointed out, “The opportunity for recyclers is massive.” But given today’s low commodity prices, changing product design and data concerns, he added, “It’s also very labor-intensive and a very hard business to succeed in.”

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